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AbstractTerms of trade (ToT) shocks drive business cycles and have direct impact on the macroeconomic equilibrium conditions in commodity-exporter countries. ToT shocks also affect the dynamics of other variables such as national income and relative prices, and consequently, cause agents and firms to adjust their saving, spending and investment decisions accordingly. The latter is of special interest because of its link with potential GDP and the capital stock of the economy, relevant concepts when assessing sustainable and long-run growth. In this document we explore how tradable and nontradable investment rates respond asymmetrically to ToT shocks. We estimate a Threshold VAR (TVAR) in which the ToT are the transition variable. The empirical results suggest the existence of two regimes (low and high ToT levels) and that ToT shocks have different effects on tradable and nontradable investment rates depending not only the direction of the shock, but also on the levels from which the shock departs.
In this paper we study the structural determinants of differentials in unemployment rates and labour markets' performance for colombian cities. Following the framework proposed by Elhorst (2003) and using cross-sectional data for 23 metropolitan areas, we apply an extension of a principal axes method proposed by Bécue-Bertaut and Pagès (2004, 2008), Multiple Factor Analysis for Multiple Contingency Tables (MFACT), in order to establish unobserved factors that are relevant when disentangling the heterogeneity captured by groups of variables that are considered to explain regional unemployment differentials. Our findings suggest that differences on qualified labour supply levels, participation incentives and age structure are important to understand regional heterogeneity on labour markets and unemployment rates. In addition, we find that cities that display high unemployment rates do not necessarily share the same characteristics, that is, frictions that originate unemployment are not the same across colombian cities.
This paper presents the construction of a tailor-made Macro Computable General Equilibrium Model for the Colombian economy that satisfies Banco de la República's macroeconomic programming and forecasting interests. Using information on the national accounts divulged by the National Statistics Department (DANE), we set an easily updatable Macro Social Accounting Matrix that serves as a starting point for the model parameters calibration and estimation.
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